Welcome back, everyone. Next, we have Evolve Royalties, a royalty and streaming company focused on providing capital to strategic element and base metal mines through innovative royalty and stream contracts. They are traded on the CSE under the ticker EVR. Happy to welcome Co-founder and CEO, Joseph de la Plante. Welcome to the conference today, Joseph.
Hi, thanks for having me today.
All right, the floor is yours. Call me back when you're ready for some questions.
Excellent. Thank you very much, Anna. Thanks, everyone. It's a pleasure to be here presenting Evolve Royalties for the first time at the Emerging Growth Conference. Evolve is a unique company in the sense that what we do, we're experts in royalties in the mining sector. The royalty business model is an established business model for the mining sector. Traditionally, we see a lot of royalty companies in the precious metal sector and take this business model in a new direction and focus on a commodity that I think is very exciting, specifically at this point in time, which is copper. We've been in the royalty space for over 15 years. Evolve is our third business that we're launching in the royalty space. Prior to Evolve, our team started a company called Nomad Royalty.
Nomad is a company that was listed in 2020, grew out over the following two years and ultimately exited through a sale to Sandstorm Gold in 2022 for just under $600 million. It's a business model that we know well. We have the experience and the expertise to be building now Evolve, but with a slightly different twist, and I think that's what's really exciting here. The world is changing in terms of our new focus on resources. We're seeing lots of changes every day from a geopolitical standpoint, and what's becoming evident is that countries now are really focused on securing a supply of critical minerals, and copper is at the heart of this discussion. We're really excited about the future for this commodity.
We think that there's lots of upside on the copper price itself that we're gonna see over the next few years. Importantly, what that's gonna do for us, it's gonna open up opportunities to finance new projects in our sector. New copper mines that are gonna come online, they're gonna require capital. We can fund them using the innovative royalty model. Now, just a quick moment here to explain this business model, 'cause if you haven't invested in a royalty company before, it is quite unique. What we do, we invest in mines directly. We acquire an interest in the mine in the format of a royalty. What that does, it gives us a percentage of the revenues from the mine, typically perpetually. We're providing capital to operators that need capital to advance their projects.
We, in exchange, get these royalties. What it does for us, it adds some revenue into our portfolio. What happens over time, these operators continue to explore on their land and increase the reserves and resources on their ground, and they think about expanding their operations. All that adds to the royalty, and we don't have to provide any further capital after our first investment. It's a really potent business model. It's one of the reasons why more investors are focusing on royalty businesses to get exposure to the commodity price within their portfolios. However, until now, there hasn't been an established copper royalty business, so this is, in a way, the first of its kind.
We're looking to position Evolve as a big player in copper on the royalty and streaming front, and to become the go-to for royalty financing for mining companies in this sector. I talked a bit about the team. Our team is very lean. You know, for the time being, we have really only three people on the team: myself, our COO, Vincent Cardin-Tremblay. Vincent is a geologist by background. He's a specialist in reserve estimation, so we're able to conduct all of our technical diligence in-house. We also have Annie Dutil, our CFO, previous partner at PwC. The three of us, all hands on deck when it comes to running this business.
Having such a lean team allows us to keep a very low overhead and focus on making sure that any dollars coming in on the revenue front, going back new acquisitions. We've raised just under CAD 70 million over the course of that period of time. That has gone into acquiring the assets that are currently in our portfolio today. We've done three acquisitions so far, all of that leading to the RTO and initial listing of Evolve in Canada in December, in late December 2025. As a public company, we've only existed for about two months, and in a lot of ways, this is really just the beginning of the Evolve story. Royalty companies, we promote ourselves as providers of capital to the mining space.
As a public company, our ability to access capital that we can then deploy increases significantly. The transition from Evolve into the private to the public side, it really opens up financing opportunities for us, both in terms of bringing in shareholders into our story, but also deploying that capital into new opportunities into the mining space. When we think about our portfolio, we want to stay dominantly copper. Our portfolio today has a good amount of copper already. We'll go through the portfolio in a few slides, but we have three very solid copper royalties in the portfolio today. A s we grow, we want to maintain that emphasis on copper. The reason being, copper, in our opinion, is the commodity.
If you're thinking about positioning yourself for, you know, the electrification trend, you know, if we think about copper, we're thinking about all the new AI data centers that we're forecasting to be built over the next few years. We're thinking about electrification of vehicles. Copper is at the heart of that discussion, and it is a widely known and understood commodity. If you look at the supply-demand for copper, going out 10, 15 years, there is a striking undersupply that's coming our way, and we want to position ourselves and our portfolio to benefit from that, from that price reaction as that materializes. As we grow, we're gonna stay dominantly copper.
That being said, we look at assets across the world in many different commodities, and we do see opportunities outside of copper every now and then that we think belong in our portfolio. Outside of copper, we also are looking at, we're looking at commodities like tin, we're looking at commodities like silver, we're looking at, in a smaller way, lithium, graphite. These things can all play a smaller part of our strategy as we grow the business. Again, all that in the context of a bigger copper-focused portfolio. If we look at our portfolio today, we have 14 assets in the business. As we sit here today, 11 of those are royalties. Most of them are focused in Canada, so we have currently a Canada-focused portfolio. We have one royalty on a lithium brine in Argentina.
Overall, a very good geopolitical risk profile today in the portfolio. We also have a small portfolio of exploration properties that we've acquired through an acquisition of a portfolio which we will be looking to, you know, divest or optimize that value over time. As we sit here, a really high-quality jurisdiction portfolio. One of the most important things when we invest in a royalty on a mine is: who is the operator of that mine? It has big impacts for us in terms of the risk profile of the royalties in our portfolio. We're always looking to be exposed to operations that have big, well-capitalized operators, and we're fortunate to have that in the portfolio today.
Our main royalties are operated by companies like Teck and Hudbay and Foran, which is being acquired by Eldorado Gold. Big, well-capitalized operators that have the means to continue to advance these operations, optimize them, think about investing in exploration. All of those activities, at the end of the day, add value to our underlying royalties in our portfolio. If we take a quick dive into the portfolio, we have four main assets right now that are, I'd say, the heart of our valuation. The three main ones being the first ones you see on the slide here, Highland Valley Copper. It's a mine located in British Columbia, Canada. It's currently producing. It's been producing since the 1960s, has a long life ahead, and it's currently cash flowing in our portfolio.
We also acquired, in 2024, a royalty on the North Pit area of the Copper Mountain Mine. This is the mine owned by Hudbay, also in British Columbia. This royalty is cash flowing, or the mine is producing, I should say. We expect to receive our first payments from this royalty late later this year. We also recently acquired a royalty on McIlvenna Bay, which is a new copper project that's currently in construction. It's owned by Foran Mining. It's located in Saskatchewan. A really exciting project for us to have exposure to. It's gonna come online later this year. That's really the core of the copper assets in our portfolio. As we grow, we want to continue to add assets such as these ones into the portfolio. We also have a lithium royalty.
Very interesting project on a lithium brine in Argentina, in Salta. The operators are currently getting ready for construction. No construction decision has been made yet. However, it's a significant high-grade resource in what most would consider the most prolific lithium region in the world, surrounded by tons of huge lithium operations. It's nearer term, or I'd say medium-term cash flow in our portfolio, very exciting project to have exposure to. To go a little deeper on some of the main projects here, Highland Valley Copper, as I mentioned, having a royalty on a mine operated by Teck Resources is really sort of the ultimate asset that we could own in the portfolio.
We're very fortunate to have this 5% NPI royalty that's cash flowing already, so we're already receiving payments on this royalty. Teck recently went through a mine life extension program that's gonna extend the life on this mine till 2046. This extension is permitted. They've announced the construction. The construction has started on this mine life extension, so really, this is kind of the beginning of the next phase of this mine. It's a really exciting time at HVC. They're going into the higher grade area of the mine plan over the coming years, so we expect some good years ahead in terms of the cash flow coming to us in our royalty. It's the largest copper mine in Canada. It produced just under 130,000 tons of copper last year.
That is forecast to grow over the coming years. Wonderful exposure for us. Moving on to McIlvenna Bay. Again, very exciting project. This one's in Saskatchewan. This is a different type of system than HVC. It's a big VMS deposit. Foran has done a terrific job getting this project on the map, getting it financed. They're most of the way through construction right now. They're building a 4,900 ton per day plant here based on the initial resource that we see. What's exciting to me on this royalty, it's really just the tip of the surface when it comes to the resources that we see today. McIlvenna Bay has an existing resource, just under 40 million tons. They're currently drilling out a new resource on a zone called the Tesla Zone.
There's no existing resource there, but it's gonna come out over the course of the year and could possibly double the resources here. These types of deposits, you know, they do grow over time, and they call them company makers because they can be quite big systems. Just with what we see here on the page, these existing deposits will provide us with a very long mine life of 20-plus years. That, again, is really just the beginning. If we look at, you know, the overall land package at McIlvenna Bay, it's a very big property. Our royalty covers all of the ground that you see here, there's lots of interesting exploration targets on some of the ground where we have royalties that will provide the next frontier of resource growth on this project.
What we can expect here, what we you know, we fast-forward three, four, five years, what we see at this project will be vastly different, likely much bigger and better, and we have exposure to all of that through our royalty portfolio. Moving on to Copper Mountain. This is, you know, the third or fourth largest copper mine in Canada. It's owned by Hudbay, very significant, very significant open-pit mine that was acquired by Hudbay a couple of years ago through the acquisition of Copper Mountain. The mine has been going through optimizations over the past couple of years, invested a lot of money into... Our royalty here covers the North Pit, so it covers areas on the yellow mining claims on this page.
It's not a life of mine royalty, the same way that HVC is and the other royalties in our portfolio. However, in a rising commodity price environment, we see a lot of value at this mine, where the operator can increase the footprint of the pit and potentially mine more resources on our royalty ground. This royalty, when we acquired the royalty in 2024, Sandstorm, who sold us this royalty, kept a carve-out for the first $10 million in payments. The mine is cash flowing, the royalty is cash flowing on about $5 million per year. That, until now, has been accruing to Sandstorm to grind through that $10 million exclusion. We think that cap will be reached at some point later this year, at which point we should receive or start receiving royalty payments to Evolve.
These are significant zones, and at $5 million a year, it is a significant royalty. As I mentioned, the life of this deposit for us, we currently see between two and five years, but there's potential upside to that based on the move in the commodity prices and how that may affect the underlying resources and reserves at this project. Near-term cash flow and lots of optionality on the commodity pricing, what that will do to the resources. Moving on to Argentina, where we have a royalty on a salar called Salar de Diablillos, where there's an operation called Sal de Los Angeles. This is a high-grade lithium brine deposit. It has about two million lithium carbonate equivalent tons, pretty significant deposit here.
What's interesting about lithium brines, they're very simple operations to put into production. It's completely different than what we typically think of in mining of hard rock lithium deposits. Brines, in a way, are closer to how you would extract an oil deposit. They're underground reservoirs where you pump the brine onto surface and then treat them. This project is permitted. They've received a permit to build a 30,000 ton per annum lithium carbonate plant. They have been shipping the equipment on site, getting ready for construction. The operator's invested, at in our estimate, close to $100 million so far, getting the site ready for construction. Lithium is a different commodity than, you know, the ones we typically invest in the sense that there's more volatility.
We've gone through a lot of volatility over the past couple of years. The operator is, at this point, picking their moment before they go on construction. It's a significant resource and upside in terms of the cash flow that this royalty will bring to us. We acquired this royalty for $6 million in 2024. Once it starts producing, the royalty would cash flow about $10 million at that 30,000 ton level. Significant cash flow versus what we paid for the royalty. That's over an estimated 20-year life, could possibly go longer.
When we think about lithium, we're not gonna be necessarily going and focusing on lithium as a commodity, but these types of opportunities are the ones where, you know, there's a place for this type of transaction in the portfolio, where we're not overly exposing our capital, but where the upside potential is there. If we think about generally our portfolio over the coming years, what excites me is there's a lot of catalysts. We have a really catalyst-rich story over the next three years.
Between the cash flow we're receiving now, the mines that are coming online in our portfolio and gonna start paying over the course of 2026, and construction starting at Sal de Los Angeles, there's a lot of developments. Over the coming 12-24 months, we expect our portfolio will transform and really show the cash flow potential. It's an exciting time for our business. When we look at our capital structure, we're a very simple story. We have, in Canadian dollars, a CAD 150 million market cap as of the share price today. CAD 40 million in between cash and investments are roughly $26.7 million. Pretty small business for the quality that we have, and that's, you know, what excites our team, is we can build on this.
We have a lot of cash to go out and make acquisitions. What we are focused on is targeting cash flowing royalties. We really want to focus on getting the cash flow up, and what that's gonna do for us is give us access to, corporate, revolver, revolving facilities, which will then allow us to transition this business to what our team does best, which is financing new projects in the sector. Going back to my initial comments in the presentation, that's really what we think the opportunity in the market is today: targeting new copper mines like McIlvenna Bay, where you have teams that are entrepreneurial, that want to build new projects, something we haven't necessarily seen a lot in the copper space over the last 10 years, but that's gonna change as the copper price goes up.
With this platform and the access to credit that we expect we're gonna get from the existing cash flow we have, but also from the acquisitions that we're gonna complete, we do think we're in a really good position to capture those opportunities. It's a really good point in time for us. The other important thing to know about our business is we really have put a lot of effort into growing the institutional investor following in our company. It's over 40% today, institutional following into their stories. The reason this is important is because, you know, Evolve has a CAD 100 million market cap today. We want to be a CAD 1 billion+ market cap business, which means we're gonna be active on transactions, and we need capital to finance those transactions.
The institutional shareholding is an important tool in our quiver, an important arrow in our quiver to achieving that. We have a really great setup in order to achieve and deliver on our business plan. We're really excited about the future. From a valuation point of view, we've been trading for about two months. Our focus now is getting the attention and visibility on our business. We are trading well below where our peers typically trade at from a price to NAV point of view. We do think as the portfolio demonstrates its quality, as our team demonstrates our ability to grow the portfolio, that we should be in a position to rerate the overall business to be in line with peers and then further grow that through acquisitions.
All that to say, it's a really exciting time here at Evolve. Lots going on in the portfolio, lots going on in the sector. I don't think there's ever been a more interesting time in the commodity space, especially in the royalty business. Lots of opportunities. We're very excited about copper. We're very excited about the commodity cycle that we think is just starting. It's a really good time to take a look at our business, and if you're interested in getting exposure to copper in your portfolio, the best way to do that would be through a royalty play like Evolve. On that note, I will end the formal presentation there, and Anna, we can go through Q&A.
Great. Thank you so much. Fascinating. I want you to talk a little bit about why copper? Why did you choose copper as a primary focus other than gold or diversified metals?
Yeah, look, we've spent a lot of time in gold in the past. The royalty model for gold works extremely well. That being said, there's a lot of well-established gold royalty businesses that are out there. I'm a shareholder of some of them. I think those are wonderful businesses, but I think this business model can deliver even more than that when we take it into new sectors like copper. Generally speaking, you know, we look at a lot of different commodities as part of growing our business. What's exciting about copper, it has a really deep liquid market. It has a big, fan base, if you will. There's a lot of people in the market following copper that understand the different, you know, supply-demand dynamics that want exposure to copper.
What we're doing here is giving them a new way to get exposure to that. I think if you look outside of precious metals, if you believe in a world where we will need more resources for everything from AI data centers, EVs, just general economic growth, then you can look at a lot of different commodities, but the one I think that will be at the center of all of it is copper. That's why we're focused on copper.
With that said, what makes the royalty model such an attractive way to invest in copper?
Well, the important thing to remember about owning a royalty versus being a shareholder of a copper company, we can get diluted. Once we acquire a royalty on these mines, let's say we acquire a 2% NSR, our percentage will be 2%. Perpetually. What it does is it gives us a very low-cost way to get this exposure over really long periods of time. What we see over 10, 20, 30 years, you get these really great cycles in these commodities that where you drive the returns on these investments.
That's why the royalty model is a really good way to get that exposure, on top of the fact that we, with a very small team, can have a huge diversified portfolio and get that diversification in terms of operators, operations, jurisdictions. What royalty portfolios have become over time is this really great low-risk way to get long-term exposure to the underlying operations and commodities in the portfolio.
Perfect. Talk a little bit about how Evolve differentiates itself from other royalty companies out there. Uh-oh, can you hear me?
Look, The royalty-
Okay, sorry.
Yes. Yes. The royalty model is, you know, it's become a very popular model. There's a big emerging part of the royalty space of junior companies that have come in and trying to make a place for themselves, mostly in the gold side of things. This is our third royalty business, so we've done this strategy before, and we have the network, we have the know-how, and we have the backers to be building now our new platform. Between that and the fact that we're taking this business model and really targeting a new part of the space, being base metals and battery metals and copper, it's a different...
You know, we're a royalty company in the same way there's a lot of royalty companies out there. This is a different idea than what you typically find in the royalty space.
What are the biggest catalysts investors should be watching over the next 12-24 months?
Well, I've talked a bit about the catalysts in the portfolio. Definitely I think what we're gonna see over the next 12-24 months, you know, copper prices have been doing well. You're gonna see the operators in our portfolio invest in their properties, looking to expand their resource, looking to expand production output. The main thing I think investors should look for when they're following Evolve is what are gonna be the next deals that we can bring into the portfolio? Our pipeline is very full. We have lots of great opportunities, what's different here is I think that we can deliver acquisitions at higher rates of return than typically what we see in the precious metal sector.
That's certainly, I think, gonna be the biggest catalyst for us, and, yeah, I'm excited about it, and I think I'm excited to share that news when we have it.
Joseph, I'll let you close with this: Tell us, what does success look like for Evolve over the long term?
Look, the main thing about, you know, our team starting Evolve is we're in this to be shareholders first. The management team, we own 15% of the company. It's the main way that we think about being compensated as a team, and we, you know, we just want our shareholders to make money. We think we have the right platform, we have the right opportunity in front of us, and we have all the ingredients to grow the business profitably and deliver strong results and returns for our shareholders. That's what, in my mind, is success for myself, and, you know, if I'm successful in doing that, I think everyone's gonna be successful alongside us.
Perfect. Thank you so much. Very exciting time to be in your industry, and we appreciate you being on our conference, and we would love to follow up with some updates in the future.
Thank you so much for having me.
All right, everyone, we'll be right back.